Andrew's Pitchfork

Andrew's Pitchfork - Overview

The andrew's pitchfork was developed by Dr. Alan Andrews and is a technical indicator comprised of three trend lines. These three trendlines are extended parallel to each other, thus the formation of a pitchfork.

Constructing Andrew's Pitchfork

The first step in constructing the andrew's pitchfork is selecting a major peak or trough. This major swing point will later be the origin of the median line for the indicator. The next part of the channel is to select the next swing high and swing low pivots after the major swing point. A line is then drawn from the major peak or trough through the middle of the second and third swing points. Lastly a line is extended from both the second and third pivot points parallel to the median line. These three parallel lines give the appearance of a pitchfork. Drawing the andrew's pitchfork is a subjective exercise and most trading platforms will provide the indicator within their suites of tools. This automated way of constructing lines, can provide a more accurate depiction of the indicator.

Trading with the Andrew's Pitchfork

Traders should use the same methods for trading trendlines with the andrew's pitchfork. A big advantage of the andrew's pitchfork over traditional trendlines, is that it allows the construction of a trading channel, prior to multiple pivot points at support and resistance lines. When the market is trending strongly, the price will stay primarily near the respective parallel line and gravitate to the median line on minor corrections. Traders can use the pullback to the median line as an opportunity to jump on board of the current trend. When prices fall through the median line, the assumption is that the price will move towards the opposite parallel line. If the second parallel line is broken, this is an early sign that the primary trend is in jeopardy. Conversely, if the price breaks out of the parallel line that is at the extreme of the range in the direction of the trend, then the security is said to be overbought or oversold. Traders should wait for the price to come back inside of the pitchfork, prior to attempting to take on new positions. Dr. Andrews believed that the price action will move to the median line 80% of the time while the primary trend is intact.

Charting Example of Andrew's Pitchfork